Where P&C brokers find the best commissions

Canadian property and casualty (P&C) insurance brokers looking to take advantage of the best commission rates should be seeking new business in commercial lines, followed by new business in personal lines, according to a new report from Smythe LLP.

“Commission rates vary widely, with meaningful differences between new and renewal business,” the Smythe report observes. “Detailed [survey] responses show that brokerages generally pay a lower commission rate on personal lines compared to commercial lines.”

The 2025 Property and Casualty Insurance Brokerage Report, released Friday, surveys an unnamed number of senior executives and leaders in P&C insurance brokerages across Canada.

Smythe notes commission structures widely vary across brokerages, but about 32% of brokerage leaders surveyed say they pay commission rates of more than 50% for new commercial business.

Another 32% of brokers report offering between 41% to 50% commission rates on new commercial lines business, according to the report.

In personal lines (home and auto) insurance, commission rates are similarly higher for brokers who find new business.

About 26% of Canadian P&C insurance brokerages report paying commission rates higher than 50% for new personal lines business. Another 26% pay commission rates of between 41% to 50% for new business.

For renewal business, commissions in both commercial and personal lines are substantially lower.

In commercial lines, for example, 46% of brokerages say they pay out between 20% and 30% commission for renewal business.

Only 8% pay out commissions of higher than 50% on commercial renewal business, while 15% of brokerages pay out less than 20% commission on commercial renewals.

In personal lines, about half of Canadian P&C brokerages pay between 20% and 30% commission on personal lines renewal business. The next highest percentage (20%) of brokerages pay less than 20% commission on personal lines renewals.

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“Brokerages make the majority of their income from premium-based commissions (i.e., a flat percentage of premiums that varies across lines of business and insurers),” the Smythe report says. “This commission typically ranges from anywhere between 11% and 25% depending on the type of policy purchased.”

Brokers may also receive a contingent profit commission (CPC), which is paid if a broker places profitable business with an insurer. CPC is generally calculated based on the percentage of claims paid to premiums earned. The lower the loss ratio, the higher the CPC.

Citing MSA Research data, Smythe says P&C insurance brokers across Canada received an estimated $16.7 billion in brokerage commissions in 2024, based on $99 billion of direct written premiums. (Assumptions included a 12% commission for auto, 20% for personal property and 20% for commercial property.)

The business mix of direct premiums written includes 43% auto, 31% personal property, and 26% commercial and other insurance lines.

Seventy-nine percent of brokers surveyed say they paid commissions on at least one type of business.

Commissions on commercial lines remain the most common, with 75% of firms paying commissions on new commercial business and 52% paying commission on business renewals. For personal lines, 65% of brokerages pay commissions for new business, while 37% do so on renewals.

“The data also shows that 21% do not pay commissions on any line,” the Smythe report says. “All of these brokerages have a majority personal lines book and most are under 10 employees.”